Foreign debt payments rise

Despite a drop in interest payments, the Philippines’ external debt service burden still modestly increased to $5.87 billion at end-May from $5.84 billion in the same five-month period last year, data from the Bangko Sentral ng Pilipinas (BSP) showed.

- By DERCO ROSAL

The 0.5-percent year-on-year increase in the country’s debt servicing on its foreign borrowings was driven by a 2.7-percent increase in principal payments, which stood at $2.65 billion as of end-May from $2.58 billion in the same period in 2024.

Meanwhile, end-May interest payments slipped by 1.2 percent to $3.22 billion this year from $3.26 billion last year.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said the external debt service burden has grown as more of the government’s foreign borrowings, many of which were incurred during the Covid-19 pandemic, have started to mature.